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VAI GVSU spinoff ready to push out specialty drugs
For a project marked by stops and starts since 2004, the opening of Grand River Aseptic Manufacturing in Grand Rapids is a reason to celebrate for Dale Grogan.
Grogan, vice president of transaction management at The Charter Group of Grand Rapids, said his firm recently worked with BrightPath Capital of Indianapolis to organize a $5 million capital infusion that brought GRAM the final mile.
GRAM, located in a 12,000-square-foot former Steelcase Inc. factory at 140 Front Ave. SW, packages injectible drugs in small runs on contract for the clinical trial and commercial markets, he said. It has landed it first commercial client, he said, and employs 12 people.
“We brought in venture capital from outside the state, which is what we really want to see in West Michigan,” said Grogan, whose Charter Group is one of the investors. “We can demonstrate that we have world class projects worthy of venture capital from all over the country.”
A management and investor team from Indiana is in place, he said, led by CEO Jerry Arthur. Arthur was president of Cook Pharmica in Bloomington, Ind., which is in the same contract pharmaceutical business as GRAM.
“Given the overall trends in our industry, we believe we have an outstanding market opportunity ahead of us in 2011 and beyond,” Arthur said in a press release. “We look forward to further strengthening Grand Rapids’ place as an emerging location of choice for the innovative biotech activity.”
The other participants in the recent investment round were Pearl Street Venture Funds and GRAM Acquisition LLC, both based in Indianapolis; local investors Grand Angels, Grand River Aseptic — Carter Group; and Eagle Creek Capital.
The roots of GRAM go back to the Van Andel Research Institute, said Jerry Callahan, business development director for the Van Andel Institute. Dr. George Vander Woude, the former research director, was frustrated by a lack of supply of active pharmaceutical ingredients for research. So he decided to make his own.
In the mid-2000s, Callahan said, VAI received $5 million from the state to invest in production of those items. The project also received a $1 million federal grant, Callahan said. But after several years of working with Grand Valley State University and the West Michigan Science and Technology Initiative, the project hadn’t gotten off the ground, and other companies across the country had filled the market void, he said.
“We did a study to see where the hole in the market was,” Callahan said. VAI and GVSU decided to pursue filling and distributing of sterile and freeze-dried compounds for clinical trials, a $4 billion segment of the $9.2 billion contract pharmaceutical market.
Callahan said they considered locating in GVSU’s Cook-DeVos Center for Health Sciences, but that would have required extensive remodeling to meet the Food and Drug Administration’s standards.
So they turned attention to the Front Street building, which already is near GVSU properties, including the old warehouse that is being replaced by a new building for the Seidman College of Business.
Then The Charter Group, primarily a mergers and acquisition firm but now a GRAM investor as well, was tabbed to bring investors together to bring the building up to the needed standards, Callahan said.
Now, he said, the company’s first client is “a large pharmaceutical company in Indiana.”
“We are going toward that vision of becoming a life sciences powerhouse, which I think we can and will do,” Grogan added. “This is another meaningful stake in the ground.”